Kennywood sale shouldn’t change much
By Kim Leonard
Wednesday, December 12, 2007
A Spanish company’s purchase of local icon Kennywood shouldn’t diminish its low-key charm and may mean more investment in the century-old amusement park in West Mifflin and its sister parks, industry experts say.
Parques Reunidos of Madrid in March plans to acquire Kennywood, Idlewild & SoakZone, Sandcastle Waterpark and other properties belonging to Kennywood Entertainment of Pittsburgh. Officials announced the deal Tuesday but didn’t disclose a price.
“There is quite a bit of backing there,” Kennywood spokeswoman Mary Lou Rosemeyer said of Parques Reunidos. But, she said, “we don’t expect them to come right in and build a new roller coaster. We are strong the way we are.”
Parques Reunidos operates 61 amusement, animal and water parks including the Madrid Zoo, with annual revenue exceeding $570 million and visitors topping 22 million.
“We have tremendous respect for the work of the Kennywood management team and are delighted to acquire such a quality organization. … We are anxious to continue the gold standard of entertainment they have established,” CEO Richard Golding said in a statement. Company officials could not be reached for further comment.
The Kennywood properties would be the company’s second U.S. acquisition, Rosemeyer said.
Parques Reunidos bought Palace Entertainment of Newport Beach, Calif., the nation’s largest water parks and family recreation center operator, for $330 million in October and took ownership of 33 sites, including the Wet ‘N Wild park in Greensboro.
Parques Reunidos has grown quickly since its acquisition in January by the London-based Candover private equity investment fund for $1.22 billion. Kennywood said the Spanish company approached its owners with an offer as part of a plan to expand its ownership of family entertainment venues worldwide.
Kennywood Entertainment has been a family business since F.W. Henninger and Andrew McSwigan bought the flagship West Mifflin park, once a picnic area accessible by trolley, from Monongahela Railway Co. in 1906.
Rosemeyer said the timing was right for a sale. The two controlling families are in their fourth and fifth generations of ownership, with more than 100 shareholders ages 8 months to 80-plus.
Harry Henninger, Kennywood’s chairman, said the experience visitors expect will continue.
“Nothing will seem different, even to the folks working at the parks,” he said. “Existing management and staff will remain in place.” The parks have 235 full-time employees, although Kennywood’s work force swells to 1,500 during the operating season.
“Kennywood is one of the most respected independent operators in the industry,” said Dennis Spiegel, president of consulting firm International Theme Park Services in Cincinnati.
The amusement park industry has consolidated in the past five years, he said, and Kennywood’s reputation made it attractive to Parques Reunidos.
One of the biggest deals last year was Sandusky, Ohio-based Cedar Fair LP’s $1.24 billion acquisition of five parks from Paramount Parks. Cedar Fair, operator of Cedar Point park in Sandusky, bought Kings Island near Cincinnati; Kings Dominion near Richmond, Va.; Carowinds, near Charlotte; Canada’s Wonderland in Toronto; and Great America in Santa Clara, Calif.
Rosemeyer said the Kennywood parks experienced their best summer this year; the three Pennsylvania parks drew more than 2 million visitors.
Brett Petit, vice president of marketing for Palace Entertainment, said the Kennywood deal might have something to do with the falling U.S. dollar against the stronger euro.
“It is a great time to buy,” he said, and Palace has been pleased with its acquisition by Parques Reunidos because the company understands the theme park business. “They understand weather issues and guest issues. It would be different if a big bank had bought us.”
Parques Reunidos has united smaller parks, allowing them to exchange ideas and buy more efficiently. It plans to open rides at several Palace sites next year, Petit said.
Peter Alexander, a former Disney theme park planner who owns Totally Fun Co. of Tampa, Fla., said American park operators have bought properties overseas for years, and the reverse is happening.
The announcement took local officials and some of Kennywood’s biggest fans by surprise.
The sale of any family-owned business is sad, West Mifflin Mayor John Andzelik said. “You wonder what foreign investors are going to come in and do.”
Bill Linkenheimer of Ross, past national president of the American Coaster Enthusiasts, which held a convention at Kennywood, said he thought the park’s sale eventually would happen.
“I’ve heard about the Spanish company,” he said, “and from what I understand, they don’t have a standard operating theme. They buy parks and allow them to run somewhat autonomously. Kennywood’s success is the result of being unique.”
The sale announcement occurred as Kennywood’s corporate officials and West Mifflin leaders were meeting with legislators in Harrisburg about a dispute over the borough’s amusement tax.
Kennywood, arguing the tax is unfair and targets the park, hasn’t paid it in about 18 months and owes about $1.5 million, Andzelik said.
Republican state Sen. Robert Regola of Hempfield has introduced a bill to repeal the tax. The Senate Finance Committee is reviewing the bill.
Staff writers Ron DaParma, Brad Bumsted and Rick Stouffer contributed to this report.
Kim Leonard can be reached at firstname.lastname@example.org or 412-380-5606.